Yet still they fall for this onerous deal because initially a house looks “cheap” when the land content is removed.
The huge increases in land values over the last 21 years serves to show what the real estate market is all about. Security and capital gain.
Just think if you had bought an investment home 21 years ago for the then price what would it be worth now?
Indeed what would you be worth now?
The moral of the story is forget all the doomsters and take the long view. Buy a freehold property and avoid leasehold land like the plague.
The Cornwall Trust, who has foisted these huge increases onto people, may be legally correct but morally repugnant.
Ground rent rise forces family out
17 Sept 2103
David Glen says surging land rents have become common.
A family of seven had to leave their Greenlane house after ground leasehold payments rocketed from an annual $2045 to $35,000.
David Glen says his family had to shift to Onehunga and rent out their big bungalow at 94 Wheturangi Rd which backs on to Cornwall Park.
Getting in rent from tenants helps cover his annual bills which at one stage built up to $200,000, which he borrowed from a bank to pay back-rent.
That was because although the new 21-year renewal was sought as far back as 2006, agreement between Glen and landowner, the Cornwall Park Trust Board, was not reached until 2011, when backdated rent kicked in. “We loved living there, that was the happiest time of our lives as a family,” says Glen of the house he bought cheaply in 2002 for $375,000 when it had a rating value of $725,000. In July 2011, his house was assessed as being worth $1.3 million, mainly thanks to its $920,000 land value.
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